Investors looking to avoid underperformance should steer clear of iShares Residential Real Estate ETF (AX:REZ) . The fund recently hit a new 52-week low. Shares of REZ are down roughly 18.4% from its 52-week high of $67.72/share.
But is more pain in store for this ETF? Let’s take a quick look at the fund and the near-term outlook to get a better idea of where it might be headed.
REZ in Focus
REZ focuses on providing exposure to the residential real estate, healthcare and self-storage markets of United States. REZ charges 48 basis points in fee per year and has AUM of $295.6 million (see all Real Estate ETFs here).
Why the move?
Lately, bond yields have been on an upward trend, as investors are getting optimistic about the economy and betting on growing inflation. Moreover, the Fed is widely expected to hike interest rates multiple times this year to tame inflation, and markets are betting on the Fed to hike rates more than three times suggested by Fed earlier. Adding to investor agony, mortgage rates are at a four-year high and the average rate for a 30-year mortgage is around 4.5% currently. In case the rates continue to trend higher, it will discourage people from buying homes or lead them to slow down their plans.
More Losses Ahead?
REZ has a weighted alpha of -16.40. Moreover, the fund has a Zacks ETF Rank #4 (Sell) with a Medium risk outlook. So, the outlook for this fund remains quite bleak.
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ISHARS-RES RE (REZ): ETF Research Reports
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Zacks Investment Research